India's 137 Cancer Drug Price Cuts: 30 Percent Margin Cap Takes Effect in November

Starting in November, the cost of 137 cancer medicines in India will drop as the government applies a 30% cap on trade margins. This expansion of price controls follows a Supreme Court decision that criticized the profit margins charged by hospitals and retailers on essential treatments. The move is designed to reduce the out-of-pocket expenses that force many working families to delay or abandon therapy.

The regulatory change originates from the case of Sarojam Radhakrishnan, a retired bank clerk from Kerala. Diagnosed with breast cancer in 2021, Radhakrishnan was prescribed targeted treatments that cost her family more than 63,000 rupees per month. Unable to sustain the expense, she petitioned the Kerala high court in 2022. The dispute eventually reached the nation's highest court, where judges reviewed the financial structures of the pharmaceutical supply chain.

Justices Vikram Nath and Sandeep Mehta described the pricing practices as "carnage" and "extortion" during a hearing on September 29. The court noted specific examples of excessive markups, including one cancer drug supplied to hospitals for 2,700 rupees but sold to patients for 27,000 rupees. This investigation revealed that hospitals, distributors, and chemists were retaining large portions of the final price.

Data from the National Pharmaceutical Pricing Authority indicated that trade markups on certain cancer drugs averaged 170%, with some instances exceeding 700%. While a 30% margin cap had already applied to 42 drugs for several years, the government has now extended this restriction to 137 additional medicines. The Department of Pharmaceuticals stated that this measure is expected to reduce medicine prices by up to 70%.

The department estimates that the new caps will help cancer patients save 2,500 crore rupees, or approximately 199 million pounds, annually. This reduction targets the financial burden that drives a substantial portion of the population into poverty. Krishan Kalra, a former council member of the Rajiv Gandhi Cancer Institute and Research Centre, noted that few people attend free diagnosis camps run by the Indian Cancer Society in Gurgaon. He explained that patients are often "too scared" to seek testing because they lack the funds for subsequent treatment.

Cancer drug costs in India range from 38,000 to 380,000 rupees. Many families leave consultation rooms after hearing these estimates. Studies by the Public Health Foundation of India indicate that healthcare spending pushes about 55 million Indians below the poverty line each year. The government's Ayushman Bharat insurance scheme offers limited relief, providing only 500,000 rupees of annual cover per family. This amount equals the cost of one dose of Kadcyla, a breast cancer drug for which patients may require up to 14 doses.

Dr. Ravi Kannan, a surgical oncologist and director of Cachar cancer hospital and research centre in Assam, described the decision as "a welcome step" if it improves access. He observed that some families begin treatment but cannot sustain it financially. India records about 1.56 million new cancer cases annually, a figure that has risen from 1.39 million in 2020. Jyotsna Singh, co-convener of the Working Group on Access to Medicines and Treatments, stated that a "total overhaul" of healthcare is needed, with transparency and regulation across the entire supply chain.

Singh warned that companies and hospitals may seek legal loopholes to offset lower drug prices by raising charges elsewhere. The Supreme Court has asked government lawyers to explain why the margin cap applies only to cancer drugs rather than all non-patented medicines. The government must respond to this query by October 27. Radhakrishnan, whose lawsuit prompted the review, died in September 2022 while her case was still pending in Kerala.